Regal-Beloit (NYSE: RBC) reported Q1 EPS of $1.98, $0.27 better than the analyst estimate of $1.71. Revenue for the quarter came in at $814.1 million versus the consensus estimate of $784.93 million.

Key financial results for the first quarter 2021 included:

• Total net sales of $814.1 million increased 10.9% from the prior year. Excluding the positive impacts of 1.8% from foreign currency, sales increased 9.1% on an organic basis.
• Income from operations was $97.1 million or 11.9% of net sales, up 240 bps versus prior year. Adjusted income from operations rose $33.9 million or 42.8% from a year ago, to $113.1 million. Adjusted operating margin of 13.9% - a record quarterly result for Regal - was up 310 basis points versus the prior year's 10.8%.
• Net cash provided by operating activities was $49.5 million and capital expenditures totaled $10.7 million, resulting in free cash flow of $38.8 million, which is 59.1% of adjusted net income.

Summarizing Regal's first quarter 2021 performance, CEO Louis Pinkham commented, "Regal delivered a very strong first quarter that solidly beat our internal expectations, with sales growth accelerating into the double digits and adjusted operating margin expanding over 300 basis points versus prior year to a record level, resulting in adjusted earnings per share growth above 50%. Our Regal team is executing at a high level, and all segments are contributing to our strong performance, aided by recovering industrial end markets, particularly in China, continued strong momentum in the HVAC, pool and data center markets, as well as pockets of share gain across the business. We also announced a transformational merger with Rexnord's PMC business, which will allow Regal to deliver unmatched capabilities across the industrial drive train, and remains on track to close in the fourth quarter of 2021."

Mr. Pinkham went on to comment, "We raised our dividend by 10% in April and as I contemplate the remainder of 2021, I am optimistic about our performance, perhaps most notably on the top line, given solid recent order momentum. While we are clearly facing commodity inflation, all of our segments continue to execute outgrowth and margin enhancement initiatives, guided by an 80/20 mindset and, increasingly, by using lean tools to remove waste, overburden and variance from all processes. Finally, recently refining our business purpose – To Create a Better Tomorrow by Energy-Efficiently Converting Power into Motion – with the subtle but meaningful addition of 'Energy' signals our commitment to be more intentional about leveraging Regal's differentiated engineering capabilities to meet growing demand for more energy-efficient products, and do our part to help the environment."

GUIDANCE:

Regal-Beloit sees Q2 2021 EPS of $1.85-$2.05, versus the consensus of $1.82.

The Company is providing guidance for the second quarter of 2021, including sales growth rates in the high-20's, GAAP diluted earnings per share in a range of $1.50 to $1.70, and adjusted diluted EPS in a range of $1.85 to $2.05. The mid-point of the adjusted diluted EPS range implies over 100% growth versus the prior year.

The Company's guidance assumes no material decline in its production capacity, or in its ability to conduct commercial operations, either from COVID-related disruptions, or other factors, including supply chain disruptions, versus levels as of the date of this release.

The Company's guidance does not take into account any costs, expenses or other effects of the transaction with respect to Rexnord's Process & Motion Control (PMC) business.

For earnings history and earnings-related data on Regal-Beloit (RBC) click here.